So You Think We Might Be In a Recession Today?

For the consideration of some people.

The Sahm Rule for determining a recession onset in real time is based on a greater than 50 bps increase in the 3 month moving average unemployment rate relative to its low in the preceding 12 months. This is the picture, using the May 2022 employment situation release data.

Source: BLS, St. Louis Fed calculations via FRED, accessed 6/15/2022.

See the discussion of the Sahm Rule for OECD countries (including the US) here. The rule is very reliable for the United States. The May reading is -0.07%.

In order for the Sahm Rule to determine a recession onset in June, the June employment situation release must report at least a 5.1% unemployment rate. How this compares against the May unemployment rate, and the May 2022 Survey of Professional Forecasters mean forecast, is shown in Figure 1.

Figure 1: Unemployment rate (black), May Survey of Professional Forecasters mean forecast (blue), and minimum level to trigger recession call in June 2022 using Sahm Rule (red square). NBER defined peak-to-trough recession dates shaded gray. Source: BLS, NBER and author’s calculations.

Could it happen? Sure. Likely. No.





185 thoughts on “So You Think We Might Be In a Recession Today?

  1. pgl

    I bet this “some people” is going to assert that the unemployment rate does not matter as in his world only oil matters. Heck he just makes up meaningless terms and flat out lies about many things including US oil consumption. Princeton Steve lives in his own ivory tower world insulated from reality.

  2. macroduck

    Repeating myself –

    The Fed went for 75 basis points. The Statement offered no indication of a pause in rate hikes. Just a strong intension to reduce inflation. Stocks rebounded a bit from recent losses, as did Treasuries. The Summary of Economic Projections show expectations of a rate cut in 2024, which seems to have helped.

    The SEP also shows a rise in the jobless rate in 2023 and in 2024, which looks suspiciously recessionary. GDP growth forecasts this year and next were reduced considerably from March, but only to right around the long-term sustainable growth pace of 1.8%. It’s possible to hide a brief recession in 1.7% growth at year-end, but it ain’t easy. The low end of the forecast range for real GDP is also positive across the forecast horizon, though the low forecast for next year is 0.8% growth. Somebody on the Committee has a forecast which could include a brief, shallow recession next year.

    Longer-term estimates for inflation, growth and he jobless rate were steady relative to March, but the longer-term fed funds rate estimate edged up to 2.5% from 2.4%. The way the math works out, it could easily tip back to 2.4%, so it’s too early to conclude that Committee members now see the neutral rate as higher.

    A big discussion of the neutral rate would be a sideshow right now, but the Fed is going to have to do it at some point. Fed officials can say they have a notion of where neutral is (real 0.5%), but we have been through a decade-and-a-half period in which the only effort to return to neutral led to financial trouble and the Fed backing rates down. What with inflation again seen as a risk, picking a non-zero target rate for normal times (wouldn’t that be nice?) will be high on the list of things the Committee will want to do.

    I’m curious to see whether policy will be as sensitive to financial stress during the coming hunt for neutral as it was in 2019.
    Reply ↓

    PS: Ivan mentioned Powell’s advice to potential new home buyers: wait. Good advice, but extraordinary coming from a Fed Chair.

    1. macroduck

      Meanwhile, the ECB has run into trouble wih its own tightening, as sovereign risk spreads have widened in response to:

      A) worsening economic conditions
      B) tightenig credit conditions
      C) last week’s ECB policy announcement

      Rolling over maturity debt from the ECB portfolio selectively, to the benefit of countries whose yields have risen fastest, is a clever technocratic choice. Not sure of the politics, but that’s what Lagarde is here for.

      1. macroduck

        Let’s not miss the SNB hiking rate by 50 basis points, to a seering -0.25%.

        First hike in a decade and a half.

    2. Andrew Garib

      Helpful context mentioning the SEP stuff. Would be a good sign if assets hit bottom upon the announcement.

      “we have been through a decade-and-a-half period in which the only effort to return to neutral led to financial trouble and the Fed backing rates down”

      That’s because of a bubble in the housing market and, more importantly, the fact that investors had no idea what their exposure was, so they high-tailed it. There is no indication whatsoever that that’s the situation we’re in now – especially as analysts are now expected to actually know how complex derivatives work. If everyone knew where the bad mortgages were in 2007/8, we would still have had a recession and a maybe even a drawn-out recovery (debt overhang), but we wouldn’t have had a financial crisis. Runs are due to asymmetric information.

      “The SEP also shows a rise in the jobless rate in 2023 and in 2024, which looks suspiciously recessionary.”

      It need not be. A small increase in unemployment could reflect real wages still being high (still drawing people into the labor force) plus a milder slowdown that makes fewer people want to leave their current jobs. That may not be how it plays out psychologically (if he’s not jumping, then I’d be crazy to jump – then no one jumps) but even that doesn’t necessarily spell “employment recession” — if demand remains strong enough.

      I think outside the context of financial crises, it’s reasonable to talk in terms of smooth, continuous changes rather than sharp reversals of fortune. In any case, a soft landing requires it.

      1. macroduck

        Andrew, in mentioning the Fed attempting to nomrmalize rates and then backing down, I had in mind 2016 to 2019:

        The effective fed funds rate only reached 2.40% before stresses in financial markets spooked the Fed. The Fed cut rates well before Covid arrived. The fact that financial stresses set in at a relatively low funds rate (nominal and real), and that the Fed decided to adress financial stresses with rate cuts, contrary to an earlier-stated intention to normalize rates, tells us a good bit about policy makers’ thinking then. I’m curious as to Fed sensitivity to financial stress after inflation is sorted out – perhaps through the effects of recession. Will they, for instance, decide than markets become fragile due to prolonged reliance on low rates?

    3. Gregory Bott

      So the Fed went with 75 basis points. They are behind. Banks are gonna drop lending standards and lift incentives like its 1999.

  3. Econned

    Ohhhhhhh boy. I can’t wait until a certain commenter gets on Menzie’s a$$ that Sham has “been wrong about some other things, such as not admitting that Dudley beat her to the punch on “her” rule”.
    This’ll be fun.

    *insert eyeroll emoji*

      1. Econned

        Wait… So “as a matter of fact” you “don’t think” you’ve made any comment…?!?! Haha. Well, because your thoughts can only be verified as factual by you, I’ll have to defer to your thoughts. Hahaha
        How about this… as a matter of fact I KNOW that my comment had zero to do any assertion you’ve made, or haven’t made, regarding any of Sahm’s writings in the past. How about that? I’ll clarify you aren’t the “certain commenter” I’m referencing. Hope that’ll allow you to rest easy tonight.

        1. pgl

          It is rather odd you asserted she “has been wrong about some other things” but you are so utterly incompetent that you listed nothing a single thing where she may have not been perfectly correct. But is that your standard – if a woman writes one or two things that turn out not to be perfectly correct, then she should be banned from economics? Yea – you are not just an utter jerk. You are a sexist jerk too.

        2. Moses Herzog

          You can do what I do when Barkley Rosser tells lies or plays revisionist history “Go back to the tape” the permalinks are still there, as are all of the posts on this site that I am aware of. And on the rare occasions text is changed, Menzie nearly always keeps the original text up with a single line crossout so as to still be readable. It’s not that hard to search these things out especially when they are on one single blog. I don’t think you’re going to find the record harvest crop in factual errors I get going back to Barkley’s comments, but if you feel that strongly about what Menzie has said related to Sahm, why not just find it and put the link up??

          My memory is that Menzie has remained neutral on the issue (a wise decision in today’s climate). Biological facts that hurt people’s feelings are now passé on some uni campuses. It is what it is, nobody wants to lose their job over it.

          1. Barkley Rosser


            I think the record is that you have falsely accused me of making factual errors far more times than you have done so accurately, having done so accurately maybe about three or four times in all these years. Of course you are off on this because you convince yourself that some things are errors that are not and then repeatedly repost them with all kinds of emboldenings of words as if this will prove somehow that I made an error. You have most recently done this a whole bunch of times on things related to the Russian invasion of Ukraine, where as a matter of fact I have made exactly one error, while you have made a whole bunch.

            Want to tell us again how Kherson and Kharkiv are the same city and how all those Russian troops in south east Romania were doing exercises in preparation for invading Ukraine?

            As it is on this matter, with it is not obvious to me if Econned was referring to me or not in his bizarre post in which he called Sahm “Sham” while appearing to criticize anybody raising the issue of what the “Sahm Rule” should be called..

            As it is, the comment I made on the matter that Menzie linked to is completely accurate, and I stand by it. I accurately reported that there was a controversy and why, and I also noted that Sahm had independently developed the rule, which Dudley accepts and is not making a fuss about the matter himself. Clearly the St. Louis Fed is calling it the Sahm Rule, so that is that.

            Do you want to explain what might be wrong about it and why Menzie’s linking to it or Econned making his barely coherent remark justifies this bs rant out of you?

          2. Barkley Rosser

            BTW, to all and sundry, I should apologize because providing the answer to Moses I did may well set him on a frenzy of posting here every conceivable time he thinks he has found me in error for many years past, which, responding to, would turn this thread into a silly cucurs.

            I shall only note that given that Menzie had linked to my comment on this matter that I stand by (note that I reported on the controversy, I did NOT side with the critics of Sahm as I think some may think I did), I was not going to bother commenting given that lots of people were taking Econned to task for this completely bizarre and stupid comment he made. But, Moses, of course you had to jump in with some of your effed up baloney.

          3. Moses Herzog

            @ Junior
            Not really, no one has the energy to clean up all your lies and half-truths. I limit myself just to the more dumb-a$$ ones. Though given, that in of itself is a heavy weight.

          4. Moses Herzog

            @ Econned
            Are you sure, I thought you were the one being a whiney B—- about Sahm taking the credit on some idea. Was Baffling stealing your blog pseudonym?? I thought Baffling was calling you out on how kind of childish you were being.

            You know what I think?? I think the more mature person doesn’t care that much who gets credit, they care if and how much the idea helps the analysis and maybe helps society make better decisions. And I judge the parties accordingly. You do remind me of when Barkley Rosser was shedding tears and whimpering about Krugman getting a Nobel—which mostly just makes me chuckle.

          5. Barkley Rosser


            Looks like you misquoted me, a liar like Moses. Two of a kind you are. I did poke at her some about her delayed willingness to acknowledge Dudley’s priority on this matter, but I most certainly did not call her what you did.

            And, one of the reasons there was such a fuss over this is that most people think this is a pretty useful measure, so it is of some importance who deserves the credit for it. It was perfectly reasonably of Menzie to post recent reports of it without any of us having to revisit this matter of exactly what it should be called or who precisely invented it.

            That you dragged this matter up was just a distraction from the more serious issue and a waste of time, which is why I did not comment on it, and only posted on this after Moses took the opportunity to make more misleading accusations against me on matters unrelated to this.

          6. Econned

            Barkley Rosser,
            Your reading comprehension is in decline. I did not criticize anybody – I was making a joke based on your prior criticism of Sahm. Why are you so upset? They are your words? Can’t handle a joke at your expense? In your words, “gag”.

            As to your claim that you are did not sidie with Sahm’s critics – you did assert that Sahm was “wrong about some other things, such as not admitting that Dudley beat her to the punch on “her” rule.”

          7. Barkley Rosser


            You are clearly a completely worthless piece of scheiss with this whole thing. You are just lying that I called her “Sham.” This is simply unacceptable and not remotely funny, as you suggested. I was going to say nothing about this, viewing as noted that this is over. It is the case that Dudley was first with and that Sahm was slow to recognize Dudley’s prior work on it. But he accepts she publicized the version of it now being used by St. Louis Fed and others under her name, so time to move on. You came in with this out of nowhere with this nasty slam I never used.

            Go eff yourself, you nauseating scumbag.

            BTW, you actually did recently make a useful and productive comment, the one on how Poisson distribution can be used for looking at the shooting data, which is used. As it is, I recognize nobody followed that up with any comments, so you decided you needed to revert to making inappropriate garbage posts here to get attention. Well, you have succeeded in that for sure. Puke on you, jerk.

      2. pgl

        In an email to CBS MoneyWatch, Dudley said he believes Sahm deserves full credit for the Sahm Rule, which he called “insightful and noteworthy.” He also said that in an earlier email to Sahm he never suggested she shouldn’t get credit, but was simply pointing out that “economists at Goldman Sachs had identified one empirical regularity that plays an important role in the Sahm Rule earlier.” Dudley was one of those Goldman Sachs economists. He said he wanted her to be “aware” of this and did not intend to “upset” her.

        Huh – Dudley is basically saying Econned misrepresented this issue. Go figure!

      3. Econned

        Wow – so you edited your comment after the fact and you do not note this? I guess it’s beneficial if you can make the rules. Good form, Menzie!
        *insert eyeroll emoji* again

        1. Menzie Chinn Post author

          Econned: The addition wasn’t material to your comment that somebody else was going to comment on Sahm. Don’t know why you are so sensitive. Please get a grip.

          1. Econned

            It was material.
            1) it was a direct reply
            2) it referenced a “certain commenter” (regardless of if that was your intent)
            Calling you out isn’t me being sensitive. It’s being rational. Please keep up.

          2. macroduck


            If childishness is rational, then OK, you’re “being rational.”

            Happy now?

          3. Econned

            He edited a comment without noting such. It isn’t childish to call that out as suspect. Childishness is what your comment represents – butting in with absolutely zero insight.

      4. ltr

        The Sahm Rule, as the Federal Reserve acknowledges, belongs to Ms. Sahm.  There was no previous publication of the specific finding, though similar findings may have been used by professional investors.  Formalizing the finding, was a useful accomplishment.

        Williams Dudley was respectful on the matter, and Menzie Chinn was as always helpful:

        January 30, 2018

        Real-time Sahm Rule Recession Indicator, 1960-2022

        1. pgl

          Williams Dudley was respectful on the matter. Yes he was. Something Econned does not know how to be.

        2. Barkley Rosser


          Sorry, you are not quite right on this, although, of course, prior to Sahm there was nobody publishing anything about it calling it the “Sahm Rule” as she did. In fact Dudley did publish his and his colleagues’ findings, but it was in a Newsletter from Goldman Sachs in 2001, not an outlet that gets much attention.

          But then, where Claudia published her rule initially was also not in a fully vetted outlet that would count for tenure in an academic setting, namely a refereed journal article. Rather it first appeared as a chapter in a book that came out from Brookings in May, 2019 that was edited by Heather Boushey, Nunn, and Stambaugh, with Heather becoming a member of the Biden CEA in 2021. The book was called Recession Ready: Fiscal Policies to Stabilize the American Economy, or something like that. It had a number of hot policy economists contributing to it, such as Jason Furman. Anyway, her chapter somehow caught immediate attention in the media in places like the WSJ and got quickly picked up all over the place. What cinched it as the “Sahm Rule” was probably in fact the St. Louis Fed establishing the data series that Menzie linked to here starting in October, 2019, only five months after its initial appearance in the Boushey et al Brookings volume, and that was pretty much that.

          The complaints about Dudley preceding her and not getting proper credit came later, with this erupting especially noisily last fall in various venues, which I reported on here. Anyway, after some huffing and puffing, I think it got more or less straightened out, although she has been a bit loathe to give him full credit, claiming with some grounds to having more fully developed it than what was presented in that Newsletter that got zero attention at the time. As noted here by several, including me, he was fine with giving her sufficient credit that it should be called just the “Sahm Rule,” which it is. The foofaraw over this is now pretty much over, although maybe people here want to get all worked up about it again.

          At least a few commenters noted that it is a very wide phenomenon in the history of economic thought that people are given credit for discovering ideas that somebody else previously discovered. So, much of this has to do with both timing and where the various discoveries were reported, so that a later version somehow gets the widespread attention and credit. The examples of this are simply legion. So, this is really pretty standard, and in this case, for once, a woman got to get the credit, when in the past more often than not there have been women who were the ones who discovered ideas first, only to have some man later get the credit for it.

          I note that I am someone especially aware of this last point coming out of my role as a coeditor of the New Palgrave Dictionary of Economics. In that volume (actually 15 volumes) there is an effort to get these things right as to where ideas really did oeriginate. So worrying about this sort of thing is a standard bread and butter thing I worry about all the time. So, not surprising that this commen event has popped up yet again in this case.

          1. Barkley Rosser

            BTW, this syndrome of things not being named after the first person who first discovered quite some time ago by the late George Stigler, and it is sometimes called the “Stigler Law of Eponymy,” usually stated as “no scientific discovery is named aftet its original inventor,” which posits this as being a problem that goes well beyond economics.

          2. Barkley Rosser

            More often than not, those who made discoveries and do not get credit for it are fotgotten and nobody knows who they were. That is often the problem upfront; they are obscure and unable to publicize their discovery, so when somebody better known with better connections for getting publicity comes along and rediscovers, they get known and get the credit.

            One curious example where the discoverer was famous involves “Malthus’s principle of population,” usually credited to Thomas Robert Malthus, whose 1798 Essay on the Principle of Population landed at a time of rising and high food prices as the Napoleonic wars were getting going and so got a lot of attention. Actually the version he had in the first two editions of the Essay were semi-botched. He posed it as a “geometric” (exponential) increase of human population crashing against a supposedly “arithmetic” (linear) increase in food supplies. The latter was totally baseless and vacuous. From the third edition on he replaced it with Ricardo’s Lae of Diministhing Returns in the face of fixed land, which is correct.

            Now several people posed the Principle of Population in various forms prior to Malthus, but somehow did not get the credit. Some of these avoided his unfortunate initial formulation regarding the limits on food production while getting that human population increases exponentially. Curiously the first person to pose it in a correct mathematical way was not somebody obscure at all but quite famous: Benjamin Franklin. He did so in an essay originally written in 1751 and published in England in 1755 as “Observations Concerning the Increase of Mankind.” His formulation, which Malthus almost certainly read but did not cite, presented it much better than did Malthus originally.

      5. Barkley Rosser

        To One and All,

        Looking at the comment by me that Menzie linked to and Econned thought was worth dragging in irrelevantly here, I think I need to make a correction to one point in it, although nobody has called me out on it. It is that I poked at Claudia for possibly having named the rule after herself. I have checked on this, and it now looks that she did not do that. In her original paper she gave her inidicator no name. I do not know who first labeled it the “Sahm Rule,” but I am now pretty sure it was somebody other than her. For sure it got fully established as that once the St. Louis Fed started publishing its data series on it calling it that five months after her paper. So, I retract that point that I made.

        I think I thought that because I saw her callling it that in so many exchanges that happened, not to mention her apparent offense at the idea that Dudley’s name maybe should have been added to the title of it, which he has been fine about not being the case. But, of course, once others named it that, then it became completely reasonable for her to also call it that. I refer to the “Rosser equation” when appropriate, even though somebody else gave it that name.

        1. Moses Herzog

          I thought Menzie linked to Kopits’ comment. Another glimpse into the ulterior world of His High Juniorness.

    1. pgl

      “Sham”? I posted her excellent interview with Bloomberg. Towards the end they got into the pathetic sexism in the economics profession. Guess why I thought of you at that point. Calling her Sham is about as sexists and disgusting as it gets. But of course that is par for the course with you.

      1. pgl

        June 16, 2022 at 2:23 am
        He edited a comment without noting such. It isn’t childish to call that out as suspect. Childishness is what your comment represents – butting in with absolutely zero insight.”

        Your standard Econned comment. Such an utter waste of space.

  4. macroduck

    About that Sahm rule. It ain’t a coincidence the thing works so well. Unlike the yield curve, which works despite being a bit removed from real activity, labor market performance is one of the factors the business cycle dating committee uses to do make its determinations. It isn’t a direct measure – participation gets in the way – but it’s pretty close. The Sahm rule is snugled right up to theissue in question. That’s why it works. Unlike oil prices, consumer confidence, inflation or Republicans’ responses to yougov polls.

    The Sahm rule has been discussed here before. Menzie posts regular updates on the time series used by the dating committee. The recession-predicting ability of the yield curve is regularly discussed here.

    Despite all of this, we get people who pretend to knowledge of the economy and its workings suggesting that unrevised, inventory-distorted GDP data, some of which is not yet released, indicates recession. Well, why not? Consumer confidence can indicate recession. Oil prices can indicate recession. Yougov polls can indicate recession. Pretty much anything can indicate recession, if one wallows in ignorance.

    What we have here is political hackery in the guise of economic analysis. I know analysis. Analysis is a friend of mine. Your grubby attempts to claim we’re in recession aren’t analysis.

      1. Moses Herzog

        Possibly the last man on Earth dumb enough to be donald trump’s next VP. “What’s this here in the fine print??~~I have to sign a waiver that 4 years into employment I won’t sue if my boss puts a death warrant out on me?? Hahahahaha!!!! You guys are joking, when has that ever happened?!?!?!?!”

    1. pgl

      “Meghan Stabile, a promoter, presenter and producer whose impassioned advocacy helped spark a resurgence of mainstream interest in jazz, particularly among young artists and audiences of color, died on Sunday, June 12 in Valrico, Fla. She was 39.”

      As someone who truly loves jazz, her suicide was a loss to all of us.

    2. Moses Herzog

      My Dad had a morbid side to him. He loved reading obituaries. But also I think he thought it had an educational value to it. When I was young I found him reading those aggravating and utterly bewildering. Now I read them voraciously (certainly the NYT ones) somehow feeling I must keep on the tradition. I got no objections to you putting them up, Menzie seems tolerant.

  5. Not Trampis

    Given that you yanks are at full employment no educated person could say your economy is in recession. Employment and unemployment are lagging indicators. They would be changing if there were a recession. They have not.

    1. pgl

      “Given that you yanks are at full employment no educated person could say your economy is in recession.”

      True but realize Princeton Steve considers going on Fox and Friends is equivalent to being in the Ph.D. economics program at MIT.

    2. Andrew Garib

      I think historically they are lagging indicators (or at least coincident, like Sahm), but that means if the labor market saw a sea change, then we’d already be well into a recession.

      If an indicator were leading, then it would be a canary in the coal mine. Yeild inversion is a leading indicator of a recession, but it makes too many wrong calls.

      1. pgl

        Wow – the stopped clock got one right finally. Now what is suppression? Oh yea – a worthless made up word.

  6. Noneconomist

    Kind of related: had lunch today at an In N Out. (Double Double, well done, no onions) Place was packed. Sign on doors offering $17/hr for beginning workers. Better than McD, which has signs up for $16. CA. Minimum for large employers is $15.50.
    Yes, $6.25/ g gas is a factor.
    By comparison, Reno minimum wage is $10.50, but beginners seem to be starting at $13-14/hr. Was there last in late May. Not a winner.
    Gas at my station of choice is currently $6.05.
    Median home sale list price in Reno topped $600K earlier this year.

  7. Bruce Hall

    President Biden has read the political tea leaves and it’s not good for him or his party. He wrote his good buddies in the oil industry and asked them to do something to help him out. But the oil companies seem to think that maybe it’s a lose-lose situation for them so they won’t be doing much to get more gasoline produced. In fact…

    Now maybe Ford and GM will build and sell far more EVs than anyone projects over the next couple of years and, to top it off, make them affordable for the average family or the recent college graduate. Then we won’t need all of that gasoline and we will be years ahead in saving the planet. But no matter how much the President may wish for that to happen, it won’t.

    As long as energy costs keep moving upward, even if more slowly, it’s going to put a strain on the economy. Combine that with the end of “free money” and we may see some abrupt changes. Some say the housing market is on the verge of a major pullback and job losses. Some say that many farmers are near calling it quits because there is no way to make a profit with the current price of diesel fuel and fertilizer. That could mean significant price increases for food. While rocketing energy and food may not “count” in the core CPI, they “probably” have an impact on the rest of the economy.

    For now, it appears that people are reluctant to change their spending plans, especially for travel, having just been released from COVID prison. If things cost more, so what? It’s catchup time. We’ll have to see how long that lasts. Maybe until their personal savings look meager.

    1. pgl

      “For What It’s Worth” is the blog of your Christopher Fountain and anyone who has read its posts realize this blog is utterly worthless. Oh wow – Jimmy Carter is OLD. So? Now your little link could be used by someone with a brain (which excludes Christopher and you) to ask what kind of market structure has quantity supplied falling as refinery margins rise. Oh way – the exploitation of market power.

      Of course Christopher Foundation is not honest enough to say that and Bruce no relationship to Robert Hall does not understand the basic economics. Go figure!

      1. Bruce Hall

        Ad hominem… once again.

        You never… ever… actually address the point. Still waiting for your CV.

        1. pgl

          I did address every feeble attempt at making a point. Maybe you are too stupid to understand my replies but hey – we all knew that. Complaining that someone is making an ad hominem attack is rich for someone routinely who calls Biden senile. BTW calling out dishonesty, worthlessness and down stupid is not an hominem attack what that person (e.g. you) does nothing more than lie and make worthless and dumb comments 24/7.

          Of course poor little Brucie still has the termperent of a 2 year old child so telling you to grow up would be a waste of time.

    2. Barkley Rosser


      National average of gasoline prices actually declined this past week, if only by a penny to $5 per gallon, and crude oil prices have dropped a bit, now below $120 per barrel. Yeah, may be just a blip before resuming rising. But maybe not. Maybe energy costs have stopped rising.

      1. Barkley Rosser

        Texas crude down to $110 today. This increasingly looks like it might have topped.

  8. joseph

    Sort of disappointed that Powell wants to see unemployment go from 3.6% to 4.1%. Why doesn’t he just come out and say that he wants to make people poorer by getting them fired. Don’t hide behind statistics.

    Also disappointed that he keeps repeating folksy anecdotes like “there are two job openings for every job seeker.” That’s not science. That’s just some sort of normative BS.

    Two for one is great. I like that when I go to the grocery store I can pick between two brands of peanut butter. Allowing job seekers to pick between two jobs is a way to ensure that only the more efficient and productive jobs get filled.

    Instead, it seems that Powell is embarking on that tired four decade path of wage suppression and low productivity of his predecessors.

    1. pgl

      Kevin Drum is arguing core inflation is already declining. Maybe hawkish monetary policy isn’t needed after all.

      1. Bruce Hall

        Oh, wow, Kevin Drum! Well, let’s just ignore our lying eyes. You get snarky about Christopher Fountain’s article which was a compilation of quoted industry articles about refineries, but drool all over Kevin Drum who wrote at Mother Jones. LOL!

      2. pgl

        Bruce Hall
        June 16, 2022 at 12:41 pm
        Oh, wow, Kevin Drum! Well, let’s just ignore our lying eyes.

        From the crybaby who whines ad hominem attack whenever he is caught being stupid, lying, or both.

        Kevin Drum has been blogging for years and NO ONE has accused him of lying because he never does. Now he does write smart posts so I can see what a total moron like you got confused.

    2. macroduck

      Back in 2017-2018, the number of job openings began to rise relative to hiring. Openings led to fewer hires than in the past. Looks like a change in the way firms list openings.

      So while openings are useful as an indication of labor market tightness, they probably exaggerate relative to openings prior to 2017. We should read then with a grain of salt.

  9. AS

    The Y/Y percent change in real retail sales and food service sales, FRED series RRSFS has now shown three months of Y/Y negative growth. I can’t find any data older than 1992, so not enough data to make confident conclusions, but for the recession starting in 2001 RRSFS Y/Y percent change turned negative prior to the start of the recession using FRED series USREC to date the first month following the previous peak. For the recession starting in 2008 RRSFS Y/Y percent change turned negative coincident with the first month of the recession. The 2020 recession seems to be a special case, so as not to be included in this comment.
    It does not seem that we are currently in a recession, but does the negative Y/Y percent change in RRSFS indicate some definite concern about the possibility of a near future recession?

    1. macroduck

      Bill at Calculated Risk once described recession forecasting “a mugs game”. Bill is a very smart man.

      Along with retail sales, housing starts and permits fell sharply in May. Truth be told, housing activity often peaks mid-cycle, so a slowdown in starts isn’t much help in figuring out the timing of recession. A housing slowdown is late cycle, but not immediately recessionary. Still, when housing and consumption both run into trouble, there’s reason for caution.

      1. CoRev

        MD opines: ” Truth be told, housing activity often peaks mid-cycle, so a slowdown in starts isn’t much help in figuring out the timing of recession. Still, when housing and consumption both run into trouble, there’s reason for caution.”

        Being in denial is obvious. Since Q1 2022 was in decline, it is highly likely that your list are indicators for for direction of Q2.

        Your greatest hope is that NBER doesn’t declare a recession until after the election, but the polls of voters will have already declared by then.

        1. Macroduck

          Really grasping, aren’t ya? You and your fellow travelers are pulling a Shrub, talking down the economy to discourage voters.

          Check the data, for once in your life. Starts turn down mid-cycle. It’s a fact, not that you know a fact if it bit you.

          1. CoRev

            MD ind denial says: “talking down the economy to discourage voters.” D-E-N-I-A-L because he can not recognize voters are discouraged because of the economy. Perhaps you haven’t noticed the world inflation, but the voters have. Perhaps you haven’t noticed the GDP slow down last quarter, but the voters have. Perhaps you have not the shortages and threats of shortages on the shelves, but the voters have.

            IN what world do you live? Come out of your bubble to see what is really going on.

    1. Bruce Hall

      Gee, pgl, with Apple dominating the world’s smartphone market, shouldn’t they drop their margins? What’s your point? That refineries should eliminate their profits so gasoline prices will go down because of a worldwide oil pricing problem caused by Old Uncle Joe’s economic advisors who told him that sanctions on Russian oil would only hurt the Russian’s economy?

      It’s the bigger picture of Biden’s anti-oil agenda that’s the problem. He wants to stifle the fossil fuel industry while begging them to pull him out of the political hole he dug for himself. []

      1. pgl

        Wow – you are now endorsing market power. Look – I have suggested hi tech should face more competition. BTW – I refuse to purchase any of Apple’s overpriced products. BTW – Biden’s advisors never had any illusions that Putin’s war would drive up oil prices. But hey more lies in order to defend your boss – the war criminal Vladimir Putin. I hope he is feeding his pet poodle well as you sold out your worthless soul a long time ago.

      2. baffling

        “sanctions on Russian oil would only hurt the Russian’s economy”
        that is certainly not the story I was told. straw man argument. I was told there will be pain at home, but this was a small price to pay to help stop a despot from taking over more of a free Europe. bruce, are you not willing to endure some of the pain for stopping Putin? people in Ukraine are losing their life to stop the madman. you are upset because it costs a few more dollars to fill up your tank of gas in the gas guzzler you know you should not have purchased to begin with?

        1. pgl

          Bruce does straw man arguments because straw is the only food this incompetent can afford.

      3. pgl

        Even though you suck at providing links, I found your rather dumb youtube entitled

        Klaxon alarm sound used in many films from the 60’s – 70’s Vol 5 (Cinesound)

        Such a weird device and sound. I bet that must be your new treatment for COVID19. Hey dumbass – stick to bleach.

    2. Andrew Garib

      Just a guess here, but wasn’t there a big increase in the demand for gasoline from about last year to this year? That could be putting pressure on refinery capacity.

      If not, then yeah, sounds like it could be market power.

      1. pgl

        You do have a point here about the rise in the demand for gasoline. Of course this point is something liar Bruce Hall routinely dismisses as he wants us all to believe that Biden sent the economy into the tank. Yea – he is that stupid.

  10. pgl

    Michael Luttig is a highly respected conservative judge who George W. Bush almost put on the Supreme Court (better choice than the one Bush ultimately made). Here will be appear before the 1/6 hearings:

    Retired federal Judge J. Michael Luttig, a staunch conservative long admired by many Republicans, will testify before the House’s Jan. 6 committee on Thursday with an urgent and stark message for the panel about former President Donald Trump’s efforts to overturn the 2020 election: “America’s democracy was almost stolen from her.” Luttig will also likely state that the Republican National Committee is wrong to have referred to some of the events of Jan. 6, 2021 as “legitimate political discourse” and warn fellow conservatives to not ignore the gravity of what Trump did as he scrambled to hold onto the presidency that day.

  11. pgl


    Back-to-back blizzards in April led to one of the steepest ever monthly declines in North Dakota oil production…Two blizzards within a week in April knocked out electricity in North Dakota’s oil patch, severely constraining production. Some operators lost 45 to 100% of their output at the time due to the storms, Helms said.

    Ah yes – Biden caused this late winter storms just to make sure Brucie boy has to pay more for gasoline.

    1. Anonymous

      Is that like hurricanes causing solar farms and wind turbines to effectively shut down? What’s your point? Weather happens?

      More to the point, how much did that actually affect total US production of oil? How much did that lost production compare with what the Keystone pipeline could have transported? And why were the wind turbines not generating the needed electricity? Oh, wait, it wouldn’t have mattered the source of the electric power because it was the downed power lines that were the problem.

      1. pgl

        Gee Bruce Hall copied and pasted your very stupid comment. Maybe you should sue him. Of course the value of your comment is negative. Excuse me troll – but this story had nothing to do with hurricanes. or solar power. But nice try.

    2. Bruce Hall

      Is that like hurricanes causing solar farms and wind turbines to effectively shut down? What’s your point? Weather happens?

      More to the point, how much did that actually affect total US production of oil? How much did that lost production compare with what the Keystone pipeline could have transported? And why were the wind turbines not generating the needed electricity? Oh, wait, it wouldn’t have mattered the source of the electric power because it was the downed power lines that were the problem.

      1. pgl

        What’s your point? Weather happens? Yep – you are THAT stupid. Even CoRev gets the point that weather affects markets’ But Keystone? If it is not produced – a pipeline cannot transport what is not there. You are even dumber than Sarah Palin!

      2. Barkley Rosser


        Are you aware that a) the oil that would have been shipped through the Keystone pipeline was overwhelmingly going to be exported out of North America and not sold in the US, and b) it would probably not have led to any noticeable increase in production in Alberta as the oil is being shipped out of there anyway, with its only effect being to lower the cost of that transportation out of North America?

        Blathering about Keystone pipeline is one of the more misleading and just plain stupid things that GOP partisan hacks shoot their mouths off about ridiculously.

        1. pgl

          “Blathering about Keystone pipeline is one of the more misleading and just plain stupid things that GOP partisan hacks shoot their mouths off about ridiculously.”

          Have you read Brucie’s other misleading comments? This one does not even make the top 10.

        2. CoRev

          I thought this was an economics blog: “Are you aware that a) the oil that would have been shipped through the Keystone pipeline was overwhelmingly going to be exported out of North America and not sold in the US, ( in a world-wide market this is some how BAD) and b) it would probably not have led to any noticeable increase in production in Alberta as the oil is being shipped out of there anyway, with its only effect being to lower the cost of that transportation out of North America?” And ” increase in production…with its only effect being to lower the cost..transportation.” WOW! How wrong can you be?

          Wha’st that ole price of crude oil and its by-products?

          1. Barkley Rosser


            Yes, this is an economics blog, and I just pointed out that the keystone pipeline was not likely to lead to any noticeable increase in production of oil in Alberta, and certainly not of much being sold in the US, although it would lower the cost of getting that oil out. Anyway, the point is that those making so much noise advocating the pipeline have way overstated its potential positive effect on global production and thus, yes, the price of crude oil and gasoline.

            That would be about economics, right? Or do you dispute the facts and believe the long and loudly spouted propaganda on this matter?

          2. CoRev

            Barkley, now says: “… and certainly not of much being sold in the US, although it would lower the cost of getting that oil out. ” Yup! We would not want to lower the cost of any factor to deliver oil. When you say “out” do you mean of Canada and to the US? If so, it is clearly not working. Now some of the oil is being trucked and trained at higher cost to the US, but a significant portion is being pumped to Canada’s cost for shipment across the world.

            Isn’t rising oil prices part of the problem to inflation and isn’t rising shipment costs also part of that rise inflation?

            You also start with this claim: “…the keystone pipeline was not likely to lead to any noticeable increase in production of oil in Alberta,…” We’ll never know will we until we have that ole pipeline will we?.

          3. Barkley Rosser


            The lowering of cost involved is basically trivial. There already is a keystone pipeline bringing Alberta oil into the US out of Canada. This proposed one simply shortens that one somewhat, utterly trivial.

            The people yapping about keystone are mostly just wildly misinformed, including you.

    1. baffling

      walker went from one child to four children in the span of a week. he of the war on absentee fathers…conservative hypocrites at their best!

  12. ltr

    June 16, 2022

    Chinese mainland records 64 new confirmed COVID-19 cases

    The Chinese mainland recorded 64 confirmed COVID-19 cases on Wednesday, with 42 linked to local transmissions and 22 from overseas, data from the National Health Commission showed on Thursday.

    A total of 111 asymptomatic cases were also recorded on Wednesday, and 1,804 asymptomatic patients remain under medical observation.

    The cumulative number of confirmed cases on the Chinese mainland is 225,118, with the death toll from COVID-19 standing at 5,226.

    Chinese mainland new locally transmitted cases

    Chinese mainland new imported cases

    Chinese mainland new asymptomatic cases

  13. ltr

    What it means for Chinese and American scientists to work together, rather than being irrationally isolated:

    June 16, 2022

    China’s supercomputer can use AI to quicken drug discovery

    Using artificial intelligence (AI) and one of the world’s fastest supercomputers, Chinese scientists are engineering otherwise unknown chemicals that can be clinically used in the future.

    The Tianhe-2 supercomputer in south China’s Guangdong Province, ranking among the global top 10 fastest computers in the TOP 500 listing published this month, has been used as a platform for drug discovery. Now, AI-based algorithms make the machine even smarter.

    Scientists from Sun Yat-sen University and Beijing-based AI startup Galixir, along with those from the Georgia Institute of Technology and the Massachusetts Institute of Technology, reported a practical deep-learning toolkit to predict the biosynthetic pathways for natural products (NPs) or NP-like compounds in Tianhe-2.

    Natural products are the primary source of clinical drug discovery. More than 60 percent of FDA-approved small molecule drugs in the United States are NPs or their derivatives.

    Over 300,000 NPs have been recorded to date, but owing to the complex production know-how, only one-tenth have been developed as a substrate or product, with the computer-aided screening urgently needed.

    In a recent study * published in Nature Communications, the researchers presented a tool called BioNavi-NP to propose NP biosynthetic pathways from simple building blocks in an optimal fashion, which requires no already-known biochemical rules.

    Firstly, a single-step bio-retrosynthesis prediction model is trained to generate candidate precursors for a target NP. The full data-driven model achieves a prediction accuracy 1.7 times more precise than the previous rule-based model, according to the study.

    Then, an automatic retro-biosynthesis route planning system efficiently samples plausible biosynthetic pathways.

    The study reveals that the toolkit can successfully identify biosynthetic pathways for 90.2 percent of 368 test compounds….

  14. Steven Kopits

    I did a short term regression the same rule (straight excel pull down) and that showed recession in July, ie, next month.

    Per the graph above, the Sahm Rule would appear to be a lagging indicator for recession compared to NBER dates.

    1. macroduck

      You’ve confused youself by looking at peaks. Peaks occur at the end of recessions. The Sahm rule is a 0.5% ppt rise in the 3-month average. Nothing to do with peaks.

      Perhaps you should take you’re failure to understand Professor Sahm’s simple rule as a learning opportunity. You could learn, for instance, that you do not have a strong facility for grasping the implications of data. You often jump to conclusions and misunderstand what’s in front of you. Understand those things and you’ll make far fewer gaffs like the one you’ve made here.

      1. macroduck

        You’ve actually given us two examples of you misunderstanding simple things. One is being confused by looking at peaks. The other is the distinction between leading and lagging indicators. You’ve claimed both that the Sahm rule is lagging and that you’ve used the Sahm rule to find that a recession will begin next month, which means the rule is leading. See? You’ve misunderstood this simple distinction.

        OK, maybe three examples. The Sahm rule is a concurrent indicator of recession, not leading, not lagging. So that’s two random draws from three possibilities, no replacement. Isn’t that something like an 83% chance of getting the correct answer on one of those draws? This game is easy to win, and still you lost.

      1. Barkley Rosser


        New layoffs declined again most recent report. Still no sign of that recession yet, although it may be coming.

      2. pgl

        WTF? This is your explanation of how you got this all WRONG. Very wrong. How dumb are you anyway?

    2. pgl

      I guess you ran the regression in incorrectly. But who knows given your pathetic writing skills. But of course you are free to lay out your pathetic attempt at regression analysis so the rest of us can be the judge whether it makes any sense.

    3. pgl

      “The Sahm Rule for determining a recession onset in real time is based on a greater than 50 bps increase in the 3 month moving average unemployment rate relative to its low in the preceding 12 months.”

      The unemployment rate steadily fell from around 6% back in May of 2021 to being steady at 3.6% for the last several months. It is mathematically impossible for the current 3 month average unemployment rate to be 0.5% higher than any rate over the last year.

      So Princeton Steve is either lying or the dumbest troll ever. Even a 3 year old would get this point but not Princeton Steve.

    4. Moses Herzog

      Is this what you’ve called a “crucifixion” recession or just a regular “suppression” recession? If the GDP doesn’t fit do we have to acquit?? You need to go on AON radio immediately and discuss this. It is lewd, lascivious, salacious, outrageous!!! Crucifixionous , and suppressionous!!! Even Laxativus!!! Or my name isn’t Jackie Chiles!!!!

  15. Ivan

    The thing about temporary price increases is that they don’t really create much inflation they just pull inflation forward. Sure those 20% increases in the price of X will feed right into the inflation numbers and make them bigger. But when the temporary inflated price of X drops back to normal that will subtract from inflation. That will happen slowly for many products but eventually getting back to normal will create a real drag on inflation. Will the Fed’s overreaction end up dumping us into deflation?

  16. pgl

    In his own words Payton Gendron explains why he murdered those people in East Buffalo:

    writing in a note he “had to commit this attack” because he cared “for the future of the White race,” according to court documents….”Gendron’s motive for the mass shooting was to prevent Black people from replacing white people and eliminating the white race, and to inspire others to commit similar attacks,” the complaint says.

    Gendron and a lot of domestic terrorists are fed this dangerous racist hate each evening as they watch Tucker Carlson’s racist show aired by Fox News. We have asked Fox News to pull Tucker’s plug but I guess Fox News wants to promote this vile replacement theory.

  17. Paul Mathis

    What Biden Needs to do Right Now

    The problems we face derive from Trump’s embargoes and tariffs.

    Biden should immediately lift Trump’s oil embargoes on Venezuela and Iran which have accomplished nothing except deprive us of oil.

    Biden should remove Trump’s tariffs on steel so that oil production can be increased faster.

    Unfortunately, Biden will not take any of these actions because the special interests that Trump was appeasing would be outraged. So Biden is just digging his own political grave and getting terrible advice from his economic team.

  18. macroduck

    Xi has followed Putin’s example in euphemizing over “war” while preparing to go to war:

    Meanwhile, China’s defense minister has ignored the euphemism and threatened war over Taiwan:

    But remember folks, China doesn’t go to war or threaten violence, just like China isn’t racist.

  19. pgl

    Michael Luttig is getting up there in age but his testimony landed hard on those delusional people who still argue Trump did little wrong on 1/6/2021. His testimony was almost chilling and very powerful.

  20. AS

    Claudia Sahm seems to have said that her rule is triggered at the beginning or soon into a recession. As I understand the reason for her rule it was to identify when to send stimulus payments to folks early in a recession in order to limit economic harm to vulnerable folks.

    Claudia Sahm description of Sahm Rule
    “… a modest rise in the unemployment rate such as 0.50 percentage points …has occurred only during or closely following recessions.” Board of Governors, Federal Reserve, Direct Payments to Individuals, Sahm, p.17. Link is below.

    FRED description: of Sahm Rule
    “Sahm Recession Indicator signals the start of a recession when the three-month moving average of the national unemployment rate (U3) rises by 0.50 percentage points or more relative to its low during the previous 12 months.

    This indicator is based on “real-time” data, that is, the unemployment rate (and the recent history of unemployment rates) that were available in a given month.”
    FRED link is below.

    1. Barkley Rosser


      Yes, she, and others in the book where her chapter than introduced her rule first appeared, emphasized increased use of automatic stabilizers. That was a main theme of the book.

  21. pgl

    Exxon went all boo hoo today noting they lost over $20 billion during 2020. Like they were the only ones who incurred financial difficulties during the pandemic. I just checked their 10-K and what poor little Exxon forget to tell us is that their profits were over $30 billion in 2021 before taxes. And of course their effective tax rate was a measly 20%. Poor little Exxon!

    1. pgl

      PBS covered this as well:

      DETROIT (AP) — Decades before Chinese immigrant Yao Pan Ma was attacked while collecting cans in New York and Thai American Vicha Ratanapakdee was fatally assaulted in San Francisco, Vincent Chin was beaten to death with a baseball bat in Detroit by two white men who never served jail time. Forty years later — and amid a rise in hate crimes against Asian Americans — Detroit has partnered with The Vincent Chin 40th Remembrance & Rededication Coalition on a four-day commemoration to honor civil rights efforts that began with Chin’s death and declare the city’s commitment against such violence. “Although hate crimes existed, Vincent Chin did bring out a flash point for Asian Americans,” Stanley Mark, senior staff attorney at the New York-based Asian American Legal Defense and Education Fund, said, calling Chin’s death “a seminal moment among Asian Americans.” Chin, a 27-year-old Chinese immigrant, was at the Fancy Pants Tavern strip club in the Detroit enclave of Highland Park for his bachelor party on June 19, 1982, when a fight erupted. Federal authorities said two autoworkers blamed Chin for layoffs at car factories due to Japanese imports. After Chin left the club, the two men tracked him down at a fast food eatery and attacked him, authorities said. Chin later died at a hospital.

  22. pgl

    Poor little Mike Lindell:

    MyPillow CEO Mike Lindell revealed on Thursday that he was enraged and “slammed” his computer during a video call after a Walmart executive vowed to never sell his bedding products again. Lindell first told his audience Wednesday that Walmart had canceled future MyPillow orders.

    WalMart has every right not to sell those worthless pillows. Especially since its CEO is a moron as well as a traitor.

  23. pgl

    Peter Doocy of Faux News is dumb but I never realized he is a stupid as Bruce Hall:

    Doocy pressed Jean Pierre to explain why President Biden’s administration is seeking to alleviate skyrocketing gas prices by calling on oil companies to increase productivity at refineries instead of calling for more drilling. Jean-Pierre argued that oil companies cut refinery capacity at the outset of the COVID-19 pandemic and have yet to increase that capacity back to pre-pandemic levels. Biden argues this, combined with Russia’s invasion of Ukraine, is causing the increase in gas prices.
    “Why not just drill more here in the U.S., though?” Doocy asked.

    Refinery margins were $0.60 per gallon last year but are twice that now. Jean Pierre got this issue right. Drill baby drill is not going to change the refinery margin issue even if it did lower oil prices – which of course Dr. Chinn has already devoted a few informative posts to note that the impact on oil prices today from drill baby drill would be zero.

    Look – if Faux News cannot ask intelligent questions – just exclude their moronic journalists from the press room.

    1. Paul Mathis

      Can’t drill more here because Trump’s steel tariffs and quotas have reduced drilling rigs and pipes. Oil drilling and production requires massive amounts of steel. The API has called on Biden to repeal Trump’s tariffs and quotas. Ironically, these tariffs and quotas are based on our national security requirements, i.e., to protect our domestic steel producers in case of war. Apparently, we won’t need more oil in event of a war.

        1. Paul Mathis

          Trump’s STEAL Tariffs

          Yup, that is what they were, but his steel quotas and tariffs are still in effect. Learn to Google.

      1. Anonymous

        by autumn calamity reserve crude inventory will be less than 400 million barrels.

        crude and product inventory are insurance for crises!

        inventory is depleting to keep energy prices down now.

        no prep for any crisis allowed

        go long on oil because we have no buffer for a gulf hurricane!

        who knows the future?

        1. Paul Mathis

          Or just buy oil from Venezuela and Iran instead of draining the SPR. Of course Joe won’t do that because he is afraid of Sen. Menendez (D-Cuba) and the Israelis who hate Iran. Stop kowtowing to special interests and stand up for America!

    2. Anonymous

      plenty of gas getting to germany, et. al through land lines in ukraine.

      ukraine war has nothing to do with energy around the world until someone bombs a facility in the operational zone.

      retaliatory energy sanctions are shooting the energy business in the foot.

      other sanctions are damaging to the nato parties as well.

      no contract is one sided, even with nato


      It’s speculation and refining is hitting 2019 levels. The price is fraud due to summer gouging. It will not last. Any war victory for Ukraine requires oil profits to dry up to destroy Russia’s currency. The Saudi’s understood this in April. The pain is not something they really want to feel. It’s up to Biden to give them some pain killers.

  24. joseph

    macroduck: “So while openings are useful as an indication of labor market tightness, they probably exaggerate relative to openings prior to 2017. We should read then with a grain of salt.”

    We should especially discount them if they aren’t raising wage offers. I run a business. I talk to a lot of other business owners. They are forever whining about employees — during good times, during bad times, during all the times in between. They never stop whining about not enough “good” employees, by which they mean cheap.

    Job openings are not serious if all they are hoping for is another cheap employee to happen along, otherwise maybe not so much.

  25. Moses Herzog

    FOX news, and also Hollywood (though I don’t think so much consciously or “intentionally”) have sold us a bill of goods on what an American hero looks like. Going back decades American heroes don’t all look like Gary Cooper, Steve McQueen, or Arnold Schwarzenegger. (did I just tell my age mentioning Gary??). Some of our strongest heroes look like Andy Tai Ngoc Huynh.

    Native Americans have also been underrated in their extreme bravery (very arguably pound for pound or man for man, better than white soldiers in willingness to throw themselves into extremely dangerous situations with low odds of survival and coming out on the other side).

    America also owes a huge debt of gratitude to the Navajo Code Talkers:

    Nobody drafted Andy Tai Ngoc Huynh to risk his life for Ukrainians. He made the personal choice. That’s as heroic as it gets folks.


      You do realize “injuns” and the “whyte man” are genetically related, don’t you. One passed east across the Bering,the other went West onto the Eurasian steppe.

      1. Moses Herzog

        Looks like I unintentionally upset Steve Bannon again. [remarks upon physical appearance of other commenters will henceforth be deleted – MDC]

        1. Barkley Rosser


          Sheesh, somebody criticizes something you said, and your response is to make uncalled for nasty comments about me when I said nothing about this. Just how effed up are you?

          I was going to say nothing here, but I am not at all clear why the heroism of Huynh somehow triggered praise of Native Americans. I do not know precisely what Huynh’s ethnic background is, but offhand that looks like a Vietnamese name.

          1. Moses Herzog

            @ pgl
            Barkley, once again, has to make everything about himself. Because once again when he thinks he’s making some “deep observation” he doesn’t realize that 85%+ of anyone reading the names knew the difference and it didn’t need pointing out or noting, that both groups don’t get recognized as they should. No one here but CoRev and sammy needed the “footnote”. But Barkley shows what an old codger he is by thinking he is the star of the room by noticing the name is southeast Asian. In his generation that may have counted as some “brilliant observation”. I would say since roughly 1970 anyone above 4th grade could tell you. But it’s not about recognizing largely unrecognized heroes, it’s about making an exhibition of something Barkley thinks only 5% of the readers noticed, and that he was “one of the few” that noticed. But he’d be letting us all down if he didn’t have to play A$$-hat at any passing opportunity.

          2. Moses Hersog

            @ pgl
            “Native Americans have also been underrated in their extreme bravery”

            The word “also” is basic English, so apparently no one taught Barkley what that word meant when he was doing his PhD studies. He just knew words like “only myself” “solely mine” “exclusively me”. You know….. words you hear jacka$$ type people use a lot. The word “also” has no function for people like Barkley so why would he need to learn it??

          3. Moses Herzog

            I will say though, Barkley Junior is the only person on this blog that definitively stated in concrete terms “Russia will not invade Ukraine”. So, Barkley is a “very special” guy, just not special in the way HE thinks he is.

          4. Barkley Rosser


            Holy cow, your blatant lying is just getting worse and worse here. I am not the one who made this about me. I said nothing, and then you made some nasty comment about my “chin hairs.” Just how out of your effing mind are you,, Moses?

            BTW, for about three days i said that Putin was not going to invade, but then with new information went back to the view I had held for months that he probably would, although not clear where or how. Indeed, the piece of sarcasm I made that you have tried to make into a serious statement about Lukadhenka’s stated fear of invasion by the Ukrainians was precisely the moment when my view changed back to what it had been, including that there was a substantial probability the Russian troops might invade Ukraine. You keep harping on something I said and held for about three dsys while ignoring that this was not my view for many months and also for the final week before the invasion.

            And I do think that the two guys are heroes, and also Native Americans have contributed enormously to US war efforts. But what any of this has to do with either my “chin hairs” or my being briefly mistaken about what Putin was going to do is a complete mystery

  26. macroduck

    The U.S. is not the only country where workers are struggling to make ends meet, though for different reasons:

    Wage cuts began as Covid slowed China’s economy in 2020:

    The fact that cuts continue helps explain weakness in consumer demand:

    Our comments-section propaganda squad desperately wants to sell the idea the U.S. is in recession ahead of the mid-term elections. Any lie is OK, as long as it keeps voters unhappy. The time wasted dealing with their lies could be better spent thinking about real economic issues, such as the risk to the global economy from simultaneous slowing in the world’s two largest economies.

    Wait! Make that the world’s to three largest economies:

    Seriously, wouldn’t it be more interesting to discuss the actual global outlook than made-up drivel about oil recessions and confidence recessions and strawberry moon recessions?

  27. ltr

    January 30, 2018

    Case-Shiller Composite 10-City Real Home Price Index and 30-Year Mortgage Rate, 1992-2022

    (Indexed to 1992)

    [ Supposing Shiller study and models of the American housing market, extending back 130 years, were correct and continue to have applicability, then I would think we could experience another pronounced decline in housing prices and as was clear in 1986 that would mean a significant loss of employment to come. ]

    1. Steven Kopits

      Maybe. It depends on how big the bubble has become and how long it has lasted. But, yes, it’s hard to conceive of a 20% drop in housing prices without a pretty stiff recession.

      1. pgl

        When an asset price follows the financial fundamentals, the term bubble is idiotic. Sort of like suppression. But do keep proving you use words you never understood.

  28. Moses Herzog

    China watchers (not morons like Kopits, like REAL China watchers) have been warning about this move for a very long time now. This story is 3–4 days old:

    Know-nothings like Mr. Steven Kopits think they understand China. They don’t have a clue. They haven’t even reached surface understanding. And I don’t have the time, patience, or even the inclination to explain it to them. If they want to make A$$ES of themselves with outrageously bad predictions on China’s citizenry/government/future, I’m more than happy to get my chuckles observing how bad they digest the facts on the ground.

    1. pgl

      “Know-nothings like Mr. Steven Kopits think they understand China. They don’t have a clue.”

      Granted. Of course Stevie proves on a daily basis he does not even understand US macroeconomic history. Of course when one’s day job is the chief economist for Fox and Friends …

    2. pgl

      “Rights groups have warned China could use its vast COVID surveillance infrastructure to stifle dissent. Without a green code on their smartphone app, citizens lose access to public transport and spaces such as restaurants and malls, as well as the right to travel across the country.”

      Stephen Miller used COVID19 to limited immigration from Central America. Trump is probably thinking “why couldn’t I have done this to limit the votes of blacks in places like Philly and Atlanta.

    1. baffling

      it will be interesting to see how this plays out. because there is still great demand for housing. the smart players will simply cool off the price increases, rather than let the house hunters walk away.

    2. macroduck

      Speaking of records, Refin reports a record high share of price cuts for homes on offer:

      That’s good news for the long-run health of the housing market, but in the near term, it’s just another symptom of a nacent slowdown in housing.

      In the old textbooks, capital investment in general was a big channel for the effect of interest rates on the economy. In reality, business fixed investment seems less sensitive to rates than housing is.

      The wealth effect from housing is stronger than from financial assets. Both housing demand and consumer spending are channels for interest rates to effect the economy through housing. Those price cuts reported by Refin, along with higher mortgage rates, mean reduced wealth extraction from housing.

      1. CoRev

        MD, isn’t there a standard economics term for this? “Speaking of records, Refin reports a record high share of price cuts for homes on offer:”


      Nope, rates don’t kill sales long term. They can set the stage for the real next debt bubble.

      1. Ivan

        In the long run we are all dead – but this coming fall housing markets will struggle with a lot of new houses that nobody can afford, because monthly payments per 100K are going up a lot.

  29. Expat

    The Fed has been operating under a Never-Ending Expansion at Unsustainable Rates for decades. Bubbles form, everyone sees them and the Fed denies they exist or will deflate calmly. The bubble bursts and banks whine so the Fed prints trillions, most of which is handed out to banks and the wealthy. The economy perks up again as interest rates are kept at ridiculously low levels. Consumption of everything is boosted far past levels of necessity; decades of real production value are burned in a orgy of hedonism and conspicuous consumption. Assets explode as the wealthy buy everything they can find. Prices are meaningless for them so third rate painting sell for million; real estate doubles in value every six months as the rich realize that the 99% can either live on the street or go into debt paying inflated rent to the 1% Overlords. Lather, Rinse, Repeat.

    This model can’t last and won’t last. The Earth is moaning in its death throes. The greatest massacre of life is well under way, caused and championed by Man. Pollution is out of control. Agriculture is being assaulted by climate change, pesticides, soil depletion and greed. The richest country on the planet spends a trillion dollars a year on weapons and systems it uses to slaughter, kidnap, torture and murder hundreds of thousands of brown and tan people every year instead of spending on education and conservation.

    And y’all are worried about some ridiculous indicator of recession? As if recession matters.

    1. Barkley Rosser


      Excuse me, but just which insane asylum did you escape from? “real estate values double every six months” “The earth is moaning in its death throes”

      Hopefully you can find your way back to wherever it is that got out of.

  30. pgl

    The NYPD is looking to identify a man they said kissed an unknown woman aboard a subway train in Midtown earlier this week, officials said. It happened at approximately 9:15 p.m. on Tuesday, June 14, inside the 34th Street-Penn Station located at the northeast corner of West 34th Street and 7th Avenue, authorities said. According to police, a 24-year woman was seated aboard the north bound 1 train as the suspect was standing next to her, waiting near the train doors. The suspect then leaned over and kissed the victim on the lips and stated “I’ve been wanting to do that; I wish I could do more,” officials said.

    Isn’t this sexual harassment. OK I know what you are thinking? But no – the pervert was not Andrew Cuomo or Donald Trump.

  31. pgl

    As the U.S. Food and Drug Administration authorized the Moderna and Pfizer-BioNTech vaccines for children as young as 6 months old on Friday, Florida is the only state to opt out of pre-ordering a supply. The decision to not order vaccines by this week’s deadline came from Gov. Ron DeSantis, which he defended Thursday saying Floridians are still “free to choose,” but the state will not use its resources to inoculate young children. “Doctors can get it. Hospitals can get it. But there’s not going to be any state programs that are going to be trying to get COVID jabs to infants and toddlers and newborns,” DeSantis said at a press conference in Miami. “That’s not something we think is appropriate.”

    A state government not using its resources to protect the lives of its youngest citizens? This governor is a disgrace. Not make that – he is a monster.

    1. Baffling

      Please forward this to corev. He has a very poor understanding of freedom of speech as protected by the constitution. Maybe he can learn something in his old decrepit age.

      1. CoRev

        Baffled – coward: “I guess your opinion on free speech depends on what people say and who they say it against.” Taking offense because you disagree is not free speech. Asking to have the disagreeable speech or speaker censured/banned is not free speech.

        BTW where are your examples of that false premise (adding renewables to a grid ALWAYS adds costs) you have so often touted?

        1. Baffling

          I find it difficult to have a conversation about free speech with somebody who believes in ghosts and ufos.

      1. Moses Herzog

        Unless all the people he shot were African American (and probably even if they were) I would presume this falls under mental health issues and not necessarily gun fanaticism. He probably had extremely poor social skills, inability to interact well with others dating back how many years. The guns probably made him feel he had some importance or power he didn’t feel he had when not waving them around or openly wearing one. I would be interested in his family background growing up, and as a “loner” how much Rush Limbaugh, Michael Savage, and Mark Levin he had listened to over the years. He may be anti-religious because of tying in religiosity with mistreatment by his parents. There’s a million avenues you could go down here than just being a gun dealer.

        And you might say “Well, my point is how can such a creep become a gun dealer??” We don’t actually imagine “the average gun dealer” as well-balanced and humanitarian types do we?? I think I would take the worst bartender over the best gun dealer if I was forced to choose between the two.

  32. macroduck

    Here is a snapshot of the Fed’s problem:

    Conventional thinking is that an inflation-adjusted funds rate of -5% to -6% is highly stimulative. It pretty obviously isn’t stimulative right now. Asset prices and housing activity suggest a relative tightening in monetary policy.

    There are two ways for the inflation-adjusted funds rate to normalize. Either the Fed hikes rates another 5% or inflation cools off. The conventional way of looking at the “real” funds rate, using expected rather than realized inflation, provides a somewhat less drastic picture of the Fed’s problem:

    Implicit in his picture is that inflation cooling off is a big part of the normalization of the inflation-adjusted funds rate. The problem with this picture is that expectations will deteriorate in time if inflation doesn’t fall. So Fed folk, knowing full well that their tools work through demand channels, go ahead and use them to address inflation that is largely supply driven. If they don’t, the problem may get worse. If it does, the welfare cost of fixin the problem will be even higher.

    Using tools poorly suited to the problem, because they are the only tools you have, can get messy. Our local hacks really want this to be Biden’s fault. It isn’t. Inflation is the Fed’s beat, and even the Fed isn’t much to blame for our current inflation. It’s a mess. Fixing the mess is likely to result in recession, because fighting inflation often results in recession, even when demand management is the right tool. It’s not the right tool now, but it’s the only tool the Fed has.

  33. Steven Kopits


    Definition: Suppression is an event exogenous to the economic system which influences economic activity at a magnitude measurable using aggregate indicators like GDP and unemployment rates.

    Example: Externally-imposed or self-imposed lockdowns resulting from, for example, a pandemic. An embargo on goods or services could serve as another example.

    Suppressions left in place long enough may cause recessions due to 1) absence of investment during the suppression, 2) job turnover and lag in rehiring terminated employees, 3) wealth effects on the population who have had to consume savings or make lasting adjustments in their lifestyles, for example, selling their homes.

    1. Barkley Rosser


      So, would you include war that kills workers and destroys capital stock along with pandemics that lead to lockdowns as “suppression”? Policy responses to that will be quite different than to the former. Looks like you are ruling out oil price shocks induced by a cartel as in the OPEC shocks in the 1970s. Again, we are back to your term does not provide an answer to what the appropriate policy response is, given that wars and pandemics are quite different kinds of supply side shocks, although thanks for providing an attempted definition, vague as it is.

      1. Steven Kopits

        You could, Barkley.

        I think the idea of a suppression that I am trying to convey is that it is 1) a policy decision, or 2) some exogenous factor like a pandemic that causes a reversible change reduction in output or demand. An oil embargo like the EU sanctions are a possible example.

        A war could be considered in this category, except wars are often unreversible. If Putin pulled out of Ukraine, we would not be back at the situation ex-ante. We’d have no war, but a lot of sanctions on Russia and a materially degraded Ukraine with a permanently altered emotional state behind it.

        The point I was trying to make was that the pandemic was not a business cycle event of the boom-bust sort. Rather it was a type of force majeure. As a result, the decline in output and employment was both historically large and severe. (If you could read graphs, you could see it on the graph. It’s plainly visible.) So 2020 was not like 2008. For example, home values were not compromised and negative equity was not an issue. Therefore, putting the FFR to zero — which was only done twice in the last century and only in the context of depressions (ie, materially compromised collateral values in the form of housing, after 1929 and 2008) — was likely to blow up asset values, which it did.

        On the other hand, any reversal could also be large and acute. So the monetary and fiscal controls are potentially more twitchy than in a normal recession. For example, we are seeing a huge inventory overhang at retailers. This suggests not a reduction in inflation (disinflation), but rather outright deflation. Similarly, take the avocado test. The normal price for avocados here was $1.67 per. The price jumped to $2 and then to $2.49. But now, Stop ‘n Shop is advertising avocados 3 / $5, which is back to $1.67. On paper, we should not be seeing that price again. If we are, then the prices are potentially a lot twitchier than people think, and we could see stiff inflation followed by stiff deflation.

        If you want to see a visual representation of how I see Powell’s current monetary policy, see the video.

        This is why I would probably be more cautious on interest rate increases and willing to accept a higher level of inflation I think the economy is unwinding with blinding speed and Powell is going to pancake it, making the same mistake going out that he made going in.

        1. Barkley Rosser

          Looks to me that you are back to any sort of supply side change, which we already call supply-side recessions. Not clear now dragging in “suppression” as a term here helps at all. You have it either too specific, happens with a pandemic, or too general, any old supply side restriction coming from a policy or a price change or some exogenous factor. Actually, what policy response should be will vary in all those cases.

    2. pgl

      “an event exogenous to the economic system which influences economic activity at a magnitude measurable using aggregate indicators like GDP and unemployment rates.”

      Gee – government purchases can be defined this way. Exports can be defined this way. A lot of things can be defined this way.

      More proof you are a waste of time.

  34. macroduck

    While I’m at it (“it” being a serious discussion of economics instead of the politically motivated schlock dumped here by trolls), here’s a look at credit spreads:

    In typical fashion, stress shows more clearly in junk than in investment-grade bonds. There have been outflows from junk funds for 12 straight weeks. IG issuers are still able to come to market, but the flow has slowed.

    This is the sort of thing the Fed might have responded to in recent years – the pace of rise in junk spreads, as much as the spread itself – but but not now. No “Fed put” while inflation is bubbling, which is a big part of why asset prices have fallen as hard as they have.

  35. Willie

    Here’s my non-technical magic dowsing stick take on it. We aren’t in a recession just yet, but we are headed in.

    Ivan has the real estate portion nailed, except that it may happen this summer, not this fall. We are seeing the cereal box townhouse developments that used to sell in the blink of an eye sit for a while. There are a bunch of them in my neighborhood. The ones that are under construction now or recently finished aren’t selling like the ones that were finished a year ago or even six months ago.

    The fact that anybody is talking about recession usually means we are already in one. Denying that we are in a recession is the marker. When the pundits finally admit that we are in a recession, we are usually out of that recession. It’s a little off this time, but close. Between the Ukraine war, oil and gasoline prices, the ongoing problems with supply chains, and interest rates making real estate less attractive, it’s coming and coming soon.

    So there you have it. The seat of the pants that usually at least says which way the chair is tilted.

    1. Barkley Rosser


      Are you aware of just how dumb what you wrote here is? So, if “anybody is talking about a recession” means that we are in one, and if somebody else has the temerity to disagree that “is the marker”? I suggest you try to find that asylum that Expat seems to have escaped from to get some help.

  36. Willie

    One other thing – I haven’t been paying attention to Bill McBride lately. He is usually pretty accurate, or at least has been.

    1. Moses Herzog

      @ Willie
      Don’t let Barkley’s bullying bother you. Some professors not happy in their work and with tenure turn into this type. They know students will generally not contradict them when waiting for their final grade. They get accustomed to not being confronted with different views, or just shutting down dialogue to booster their sense of self-importance. Nothing you stated was that out of whack, and honestly I took it as you just “thinking out loud”. To me that’s some of the fun of a blog, conversing and throwing stuff off a sounding board. The “tone” of your comment conveyed that. Weren’t you the commenter who told us you had some knowledge on construction?? I find your comments edifying for the most part. I would say he probably accidentally kicked his preparationH under the bed, if he didn’t attempt to bully people 24/7.

  37. ltr

    October 1, 2021

    Stock, Bond and Real Estate Prices Are All Uncomfortably High
    An economist says the three major U.S. markets all show signs of severe overpricing.
    By Robert J. Shiller

    The prices of stocks, bonds and real estate, the three major asset classes in the United States, are all extremely high. In fact, the three have never been this overpriced simultaneously in modern history.

    What we are experiencing isn’t caused by any single objective factor. It may be best explained as a result of a confluence of popular narratives that have together led to higher prices. Whether these markets will continue to rise over the short run is impossible to say.

    Clearly, this is a time for investors to be cautious. Beyond that, it is largely beyond our powers to predict.

    Consider this trifecta of high prices:

    Stocks. Prices in the American market have been elevated for years, yet despite periodic interruptions, they have kept rising. A valuation measure that I helped create — the cyclically adjusted price earnings (CAPE) ratio — today is 37.1, the second highest it has been since my data begin in 1881. The average CAPE since 1881 is only 17.2. The ratio (defined as the real share price divided by the 10-year average of real earnings per share) peaked at 44.2 in December 1999, just before the collapse of the millennium stock market boom.

    Bonds. The 10-year Treasury yield has been on a downtrend for 40 years, hitting a low of 0.52 percent in August 2020. Because bond prices and yields move in opposite directions, that implies a record high for bond prices as well. The yield is still low, and prices, on a historical basis, remain quite high.

    Real estate. The S&P/CoreLogic/Case-Shiller National Home Price Index, which I helped develop, rose 17.7 percent, after correcting for inflation, in the year that ended in July. That’s the highest 12-month increase since these data begin in 1975. By this measure, real home prices nationally have gone up 71 percent since February 2012. Prices this high provide a strong incentive to build more houses — which could be expected eventually to bring prices down. The price-to-construction cost ratio (using the Engineering News Record Building Cost Index) is only slightly below the high reached at the peak of the housing bubble, just before the Great Recession of 2007-9….

    Robert J. Shiller is Sterling Professor of Economics at Yale.

  38. ltr

    June 18, 2022

    Bitcoin Plummets Below $20,000 for First Time Since Late 2020
    Its fall was accelerated in recent weeks by the collapse of two major cryptocurrency projects while sowing doubts about the stability of the overall cryptocurrency market.
    By Erin Griffith and David Yaffe-Bellany

    SAN FRANCISCO — The price of Bitcoin fell below $20,000 for the first time since late 2020 on Saturday…

    [ I would expect crypto-currency losses to complicate the developing economic down-turn. ]

    1. ltr

      June 17, 2022

      Wonking Out: Wasn’t Bitcoin Supposed to Be a Hedge Against Inflation?
      By Paul Krugman

      There’s a financial joke, whose origin I don’t know, that has been making the rounds lately. It goes like this: If inflation continues at current rates, the purchasing power of wealth held in dollars will be cut in half over the next eight years. But cryptocurrencies can beat that: They can lose half their value in just a few months.

      Haha. But crypto enthusiasts have indeed marketed their products as an inflation hedge. Coinbase, the biggest United States crypto exchange, declares that cryptocurrencies are appealing because “they’re more resistant to inflation than fiat currencies like the U.S. dollar.” This is, not incidentally, the same argument people used to make for holding gold.

      But a funny thing happened as fears of inflation grew, as seen in this chart showing Bitcoin’s price in U.S. dollars over the past year:

      This wasn’t supposed to happen….

      [ That crypto-currency was to counter monetary policy, strikes me as “supposed” to happen by enthusiasts or speculators. ]

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